Sweden’s Evolution loses $ 3 billion in market value on allegations of illegal gambling
STOCKHOLM, Nov. 17 (Reuters) – Swedish gaming company Evolution AB lost about $ 3 billion in market value on Wednesday, after a US law firm accused it of operating in countries such as Iran, in violation of US sanctions.
The manufacturer of online slot machines and roulette games has grown rapidly as more people turn to online gaming during the pandemic, and the United States has become a focus as more of its regions legalize sports betting.
The complaint was made in a letter last week to the New Jersey Division of Gambling Supervision on behalf of unnamed private investigators, Bloomberg reported here.
The law firm, Calcagni & Kanefsky LLP, did not respond to requests for comment outside office hours.
The Bloomberg report said that the investigators, who were arrested by a US-based competitor to Evolution, recorded themselves playing games via Internet addresses in Singapore and Hong Kong, where online betting is prohibited.
A spokesman for Evolution denied the allegation, saying it strictly complied with all applicable laws and regulations.
“We use all the tools at our disposal to block games from certain countries, including all countries on sanction lists mentioned in the article,” he said.
Evolution does not own or control any of the operators it works with and has no direct relationship with the underlying player and involvement in the management of players’ money, he added.
The company’s shares fell 9% in morning trading, following a 62% rise this year to a valuation of $ 33 billion.
While Evolution is holding back its games from countries on sanction lists, the complaint raises questions and may draw increased focus from regulators, which is not positive, said Pareto Securities analyst Marlon Värnik.
The Department of Supervision in New Jersey to which the complaint was made is the investigative part of the casino regulation system and prosecutes all casino-related crimes. (Reporting by Supantha Mukherjee and Boleslaw Lasocki; Editing by Clarence Fernandez)